I’m trying to see if anyone knows if this is legal or not.
Asking Rent: $700.00
voucher: $500.00
Tenant willing to pay the extra $200.
I’ve been told that this is illegal, still searching my self but thought I’d ask here also.
Thanks in advance
i’ve had applicants ask me to do this in the past and i’ve turned them down. i’m pretty sure it is against some rule, not necessarily a law. meaning, if they do this, section 8 will probably drop them from the program.
more importantly (to me), they’re going to ask you to submit a lease to section 8 that says $500. how are you going to ‘prove’ they owe you the other $200 when they don’t give it to you and don’t move out of your property?
i know people do this, but i’m not one of 'em. i’d like to hear from someone who knows how this ‘works’.
bdub,
You are exactly right! Do not take more than the section 8 voucher.
Mike
I was asked to do this once, and I also turned them down. She said that her husband owns his own business and they make SO MUCH money but the they don’t claim it. In the end I think you’re just setting yourself up for trouble.
The voucher amount is only the amount that section 8 is contributing. You can charge rent over the voucher amount but only up to the amount that section 8 is allowing them to pay, which is a percentage their income.
lansing_rei,
That is wrong. You are using semantics to twist the issue. Section 8 dictates the amount that they will pay and the amount the tenant must pay. You can not charge more than this amount. The amount of rent is not a simple percentage of their income, although that is one component. The computation also includes the projected cost of utilities, the type of appliances and who is supplying them, the local payment standard, etc.
Mike
Section 8 has max amounts that can be charged for the total rent. The factor is dependent upon what city your property is in, how many bedrooms, and if you pay utilities. What the tenant pays is about 30% of their income. So if they make $1,000 a month then they pay $300 a month and section 8 pays the rest.
Example:
I have a four bedroom home that has a max rent of $840 (which is high for the area). The tenant pays $353 a month and section pays the rest. But I can not charge more then the max of $840 a month. Also I can not charge $840 a month for this 4-bed and then charge only $600 for non section 8 4-bed properties.
Section 8 maximum rents are pretty decent. I have never found a reason not to charge the max amount of rent section 8 will allow. The tenant doesn’t care what you charge because they only pay a percentage of their income.
propertymanager,
What I said is not wrong. We said the same thing. You just went into more detail on how they figure out how much section 8 will allow the tenant to pay.
So let me get this straight, since there were 2 conflicting opinions presented in this thread:
You CAN charge more rent than the voucher covers.
You just CAN’T charge more rent than the HUD determined rate.
The tenant pays the difference between the voucher and the total rent.
Right?
Section 8 determines the max amounts of TOTAL rent you can charge. So the voucher plus what the tenant pays can’t be more then that amount.
So yes you are correct Land Baron. 
Here’s an example of how that really works. Tenant has a voucher that says she can pay up to $850 a month. We say we charge $900 a month. It goes back to section 8 and they have a little leeway with the maxium rents. Also I think it had something to do with the fact that her share of the rent was like $400 and section 8 was paying $450 and they were able to raise their share up to $500. So after the inspection it came back that they would allow the $900 rent and we got our $900.
In another case we had another unit where we tried to get $900, wasn’t as nice a unit and the sitution was a little different. Section 8 would only allow $745 so we just took our lumps and accepted it. The next year we did a rent increase and they approved $850. I’m going to see what happens the year after with another increase. They don’t seem to mind if you raise the rent a little every year. I think we got a little lucky going to $850, I though they were going to knock me back down, but they just approved it.
I looked-up HUD’s Fair Market Rents for my area (within 50 miles).
Depending upon the town and county:
2BR $477 - 519.
3BR $604 - 689.
Looks like I’d have to buy at a really good price to have good cash flow while financing. Median-priced homes could be tight. However, there are lower priced homes in areas that aren’t as nice that would still provide good cash flow at these rent rates.
I had just always assumed Section 8 would bring a lot more headaches.
I agree there is definitely some flexible in most areas of Section 8. One of my tenants was really struggling to make their portion of rent. So I called the manager at the Section 8 office and asked if he could raise the portion that Section 8 pays. Now the tenant only pays $35 of the rent.
Be very professional with Section 8, but be very hard on them. An inspector toar apart one of my SFH once. I was very livid on the phone with him and he backed down.
It’s your property and you are the boss, never forget that when you are dealing with Section 8.
Hi Everyone,
I was under the impression that the local housing authority wil pay 70% of the tenants rents and you collect 30% from the tenant ? Is this accurate ? or does it depend on what state you are located ?
Thanks
That is wrong. Reread my earlier post above.
Mike
Stevegent,
It’s 30% of the tenant’s income, not 30% of the rent. I don’t know if there is an across the board rule, but that is how it works where I live.
Example: Tenant makes $1,200 a month, so they pay $400 of the what the rent is, and Section 8 pays the rest.
The rent max is determined by how many children, their ages, bedrooms, utilities, etc.